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Australia Inflation Q4 2022

Australia: Inflation at over three-decades high in Q4

Annual inflation came in at 7.8% in Q4, up from Q3’s 7.3%, hitting the highest reading since Q2 1990 and beating market expectations. Therefore, inflation moved further above the Reserve Bank’s 2.0%–3.0% target band. The main drivers of the acceleration were services such as holidays and restaurant meals.

Meanwhile, consumer prices soared 1.9% over the previous quarter in Q4, up from Q3’s 1.8%.

Commenting on the release, Robert Carnell, regional head of research for Asia-Pacific at ING, stated:

“A lot of what we are seeing is still one-offs and seasonal shocks, and we do think that in a few months, those shocks could quickly start to drop out of inflation again. As a result, we still eye lower bond yields as the easier direction of travel now that they have risen on this inflation news. The main risk to this view is that we may not yet have seen an end to the one-offs and seasonal shocks.”

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